The stark contrast between east and west coast continues unabated, with clear skies and warmer temperatures in the west for the majority of harvest (albeit perfect weather for the smallest wheat crop in 44 years!). While in the east coast milder temperatures and persistent rain has delayed harvest and frustrated farmers with the biggest crop in decades flooded and unaccessible in paddocks.
Many regions received well in excess of their monthly average in the first few days of December, while another front is moving through South Australia today and into the eastern states tomorrow through to Thursday which is expected to bring large totals to the south east of the country (at least one good thing can come of it, it looks like it may be a washout in the cricket in Adelaide and we may be able to salvage a draw!). For some regions this weeks rainfall event could be the straw that breaks the camel back; as last weeks heavy storms knocked over crops and flooded paddocks.
There are some extravagant claims out there regarding the extent of the weather damage along the east coast. Analysts from the States are reporting that as much as 90% of Australia’s crop will be downgraded to feed quality. Now this is just absurd, either they should check the reliability of their sources or they just want to keep feeding the bulls..!
Although with all rainy harvest it is an evolving situation we can’t get a firm idea on quality until harvest can restart. It is estimated that of the 7-8 mmt of wheat that has been stripped, 1 – 1.5 mmt would be classified as weather damaged. And if this approaching rain front intensifies and dumps the 35 – 75 mm that is projected, expect another 8-10 mmt downgraded to weather damaged (and that is not factoring in abandon paddocks)
In WA the harvest is drawing to a close, the current east coast delays is proving attractive pricing opportunities, with ANW1 up $70/mt, H1 $71 and APW $45 over the last couple of weeks. There is also talk that overseas buyers may relook at shipping from WA as the tonnage and potentially high protein wheat isn’t at port in eastern Australia. This may potentially add further upside to spot prices as traders quickly scramble for last minute tonnage.